Under the Inflation Reduction Act, projects qualifying for an ITC or PTC may be eligible for "adder" or bonus credits for projects meeting certain requirements. See additional details for criteria.
Credits begin to be reduced after January 1, 2034 or when emission targets are achieved (i.e., the electric power sector emits 75% less carbon than 2022).
Technology neutral production tax credit is an emissions-based production tax credit that is neutral and flexible between clean electricity technologies. Credit of 1.5 cents/kwh (inflation adjusted to 2.8 cents/kwh). Taxpayers choose between a PTC (45Y) and an ITC (48E).
Credits start January 1, 2025 and begin to be reduced after January 1, 2034 or when emission targets are achieved (i.e., the electric power sector emits 75% less carbon than 2022).
Credit of 1.5 cents/kwh (inflation adjusted to 2.8 cents/kwh).
Building owners can get a section 179D tax deduction for new construction and retrofits to commercial buildings. The energy efficiency improvements, including lighting, envelope design, and heating and cooling, must reduce the energy consumption by a minimum of 25% when compared to a building that meets the minimum requirements of Reference Standard 90.1 of the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE).
Building owners can get an additional 179D deduction every three years for subsequent energy efficiency improvements.
Builders and contractors of single-family and manufactured homes can collect a credit for meeting the Energy Star Program requirements and the DOE Zero Energy Ready Home criteria. Builders and contractors of multifamily homes can collect a credit for each Energy Star-compliant unit or Zero Energy Ready Home-compliant unit.
Available through December 31, 2032.
A $7,500 tax credit tax for the purchase of electric vehicles or other qualified clean vehicles for commercial vehicles under 14,000 lbs. and a $40,000 tax credit for commercial vehicles over 14,000 lbs.
Available through December 31, 2032.
(1) In general
The lesser of-
(A) 15 percent of the basis of such vehicle (30 percent in the case of a vehicle not powered by a gasoline or diesel internal combustion engine), or
(B) the incremental cost of such vehicle.
(2) Incremental cost
The incremental cost of any qualified commercial clean vehicle is an amount equal to the excess of the purchase price for such vehicle over such price of a comparable vehicle.
(3) Comparable vehicle
Comparable vehicle is any vehicle which is powered solely by a gasoline or diesel internal combustion engine and which is comparable in size and use to such vehicle.
(4) Limitation
The credit shall not exceed-
(A) in the case of a vehicle which has a gross vehicle weight rating of less than 14,000 pounds, $7,500, and
(B) in the case of a vehicle not described in subparagraph (A), $40,000.
This program provides credit assistance to creditworthy borrowers for:
- Projects that are eligible for the Clean Water SRF, notwithstanding the public ownership clause
- Projects that are eligible for the Drinking Water SRF
- Enhanced energy efficiency projects at drinking water and wastewater facilities
- Brackish or seawater desalination, aquifer recharge, alternative water supply, and water recycling projects
- Drought prevention, reduction, or mitigation projects
- Acquisition of property if it is integral to the project or will mitigate the environmental impact of a project
- A combination of projects secured by a common security pledge or submitted under one application by an SRF program
LOIs accepted on an ongoing basis beginning September 6, 2022.
Under the IRA, owners of renewable energy projects will be able to choose between an Investment Tax Credit (ITC) or Production Tax credit (PTC). An ITC reduces the cost of installing clean technologies, while PTCs credit project owners for the production of their clean technologies. Stand-alone storage is only eligible for the ITC. For greater detail on the timelines and credit amounts, see the linked tables:
Disclaimer: Nothing in this summary should be interpreted as tax or legal advice.
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